The arrest of Agni Air chief Sudhir Basnet on charges of fraud has exposed loopholes in the financial system of Nepal

Basnet's family has termed the case malicious, but depositors have termed it a fraud. The arrest of Sudhir Basnet, chief of Agni Air and Oriental Housing Company, has exposed how depositors’ money is insecure in Nepal. Nepal Rastra Bank sources claim that about a dozen banks and financial institutions are in a crisis due to bad loans given to Basnet. Based on half a dozen complaints from his clients on fraud, Nepal Police took him in custody.

Chairman of Oriental Cooperatives and Oriental Housing and Builders, Basnet reportedly accumulated about 3 billion rupees from depositors. As Basnet is in custody, over 100 depositors have demonstrated in front of Hanuman Dhoka Police Station demanding the return of their money from Basnet.

Basnet's close ones, however, have blamed the government for his arrest as taking sides with some businessmen who want to take away his airlines property. Along with hundreds of depositors, Basnet also funneled a huge amount of money taken from a dozen of banks to the airlines, real estate and housing sector. "By arresting Basnet, some groups want to capture Basnet’s property," said his family members.

"We have arrested Basnet on the basis of complaints registered by one of the depositors. After his arrest, many others are coming to file similar complaints of fraud against Basnet. After collecting more evidences, the police will file the case in the court," said the Metropolitan Police Department. With the real estate business passing through a recession, Basnet, who heavily invested his depositors’ money in real estate, seems to be in real trouble.

The depositors of Oriental Cooperatives have already captured the office demanding refund of their money. Even Kuber Merchant and Finance is now facing financial crisis due to over Rs. 890 million loans given to Basnet, who is also in the board of directors of Kuber Merchant and Finance.